Three years ago, Irene and Julie formed Hummingbird Corporation. Each transferre

Question

Three years ago, Irene and Julie formed Hummingbird Corporation. Each transferred property to Hummingbird in exchange for 50 shares of its stock. In the current year, Jaime transfers property worth $600,000 (basis of $90,000) for 50 shares (a one-third interest) in Hummingbird Corporation.

what are the tax consequences to Jaime and to Hummingbird on the transfer in the current year? Check all that apply.

1. Jamine has 80% control immediately following the transfer.

2. Jaime has a taxable gain of $ 510,000.

3. Jamie has a baisis of $600,000 in the stick, and Hummingbird Corporation has a basis of &600,000 in the property.

4. Hummingbired Corportaion has a basis of $600,000 in the property.

6. The exchange will qualify under 351

Explanation / Answer

1. Jamine has 80% control immediately following the transfer 3. Jamie has a baisis of $600,000 in the stick, and Hummingbird Corporation has a basis of &600,000 in the property.

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